Many Have Heard About the AMM DEX STON.fi, but Not Everyone Knows About Its Tokenomics
Let’s break it down! 🔥
Why Is It Important to Understand Tokenomics?
Tokenomics — literally the “economics of a token” — helps you understand how a token functions, its purpose, total supply, distribution among stakeholders, and its mechanisms for combating inflation.
Tokenomics reveals:
Total Token Supply: The total number of tokens that can ever be issued.
Token Purpose: The function the token serves within its ecosystem.
Token Distribution: The allocation of tokens among investors, developers, and the community.
Inflation Control Mechanisms: How the project counteracts inflation to increase the token’s value.
What Is STON?
STON is the native token of the decentralized exchange STON.fi, operating on the TON blockchain. Market Cap: $4.08M
|Coingecko|Coinmarketcap|Geckoterminal|
STON.fi is the largest exchange on the TON blockchain.
Its TVL (Total Value Locked) is $150 million, making up 50% of TON’s total TVL of $300 million.
According to CryptoRank and DappRadar, STON.fi ranks 5th among the most popular decentralized exchanges across all blockchains.
This shows that STON.fi is a major and popular project, making it crucial to understand STON’s tokenomics to keep up with the rapid growth of DeFi protocols.
Why Do You Need the STON Token?
STON is the governance token of STON.fi, giving you the ability to participate in the DAO community. To do this, you must stake STON tokens on the STON.fi exchange. The power of your vote depends on the number of tokens staked and the duration of the staking. The DAO is currently under development.
Additionally, staking STON tokens rewards you with GEMSTON tokens. Although GEMSTON’s supply is theoretically unlimited, one of the DAO’s tasks will be to introduce mechanisms for regular GEMSTON token burns.
Want to learn more about staking STON tokens and how DAO works on DEX exchanges? Read my article!
Token Distribution
The total token supply is: 100,000,000 STON
Total Supply: 100,000,000 STON
DAO Allocation: 50% (Treasury fund managed by DAO, incentive programs, marketing, and operations).
Team and Advisors: 19% (allocated to founders, team, and advisors).
Investors: 31% (allocated to pre-seed and private investors).
Key Points:
DAO Treasury: 20 million tokens, staked for 24 months. Afterward, they can be partially used as decided by the DAO.
Incentives: 10 million tokens, linear vesting over 5 years. This DAO pool is intended to increase protocol usage (referral bonuses, liquidity mining, etc.).
Operations: 10 million tokens (4 million available immediately, 6 million with 5-year vesting) for operations and protocol support.
Inflation Control Mechanisms
The STON token follows a deflationary model: its supply is limited to the initial issuance. The token supply decreases over time through buybacks and burns.
Buybacks: All protocol fees are converted into STON tokens.
Burns: A portion of the repurchased tokens is burned, reducing the circulating supply and increasing the value of the remaining tokens. (This mechanism is currently under development.)
The combination of buybacks and burns effectively reduces the token supply, making the remaining tokens more valuable, leading to long-term growth 📈.
STON.fi Fee Distribution
Protocol fees are charged on all transactions on the STON.fi DEX. Specific mechanisms depend on the type of protocol (RFQ or AMM) and the blockchains used for trading.
All fees collected from DEX transactions are automatically converted into STON tokens and redistributed according to DAO decisions.
Smart Contracts for Fee Distribution:
Fee Converter: Accepts fees in various tokens and converts them into STON.
Fee Distributor: Collects all fees as STON tokens and redistributes them according to DAO-defined parameters.
Burn Contract: Burns all received STON tokens, reducing the supply and increasing demand.
Other Directions: The Fee Distributor can direct a portion of the fees to other smart contracts as decided by the DAO, enabling additional mechanisms like staking rewards, liquidity mining, etc.
The DAO will have the ability to influence the deflationary model, such as increasing the percentage of tokens burned or deciding to burn a specific amount through voting.
Conclusion:
STON.fi follows a deflationary tokenomics model, as a portion of the fees converted into STON tokens is burned. Furthermore, the supply of STON tokens is capped at 100 million.
What motivates users to buy STON tokens is the developing DAO governance protocol, which requires staking STON tokens to gain voting rights.
STON.fi social networks:
Twitter - @ston_fi Telegram - @stonfidex Reddit - r/STONFi
